Private Funding Needed to Build 2.5m Homes

Iraq’s housing fund is falling short of its goals and will struggle to raise fresh capital after spending more than two-thirds of its budget, its director said in an interview with Bloomberg.

The fund, which started in 2005 with 300 billion Iraqi dinars ($257 million), has spent 210 billion dinars building 14,000 homes in Iraq, Khairi F. Awn said at the Iraq Housing Development Summit in Amman, Jordan.

“We are far away from achieving our goals,” he said. “A crisis of this size can’t be resolved by any government, even using all its resources. The private sector and foreign investment have to be there to resolve the problem.”

Iraq’s Housing Minister, Bayan Dizayee, said on Monday that the country needs 2.5 million homes to be built by 2015. Awn estimates that 300,000 homes must be completed every year to keep up with the increase in population.

Raising capital is the main issue facing the fund, which provides loans to government employees and retirees as well as financing developments, Awn said. Selling bonds is “out of the question” because of legal hurdles and the wait for Iraqi’s new government to be formed, he said.

“The fund was developed in a rush,” he said “The law was weak and the budget was not big enough to help achieve one of our main goals, which is providing financing for projects,” Awn said.

In March, Iraq’s Council of Ministers approved plans to build one million apartments from 2010 to 2014 for lower -and middle -income families.